JB Chemicals, Dr Reddy's call of Russia-CIS business deal

JB Chemicals & Pharmaceuticals Ltd (JBCPL) today announced the cancellation of the proposed sale of its Russian subsidiary to a subsidiary of Dr Reddy's, in their overall business interest.

"JBCPL as well as Dr Reddy's have agreed with immediate effect not to pursue the proposed deal in their overall business interests," the company said in a filing with the Bombay Stock Exchange (BSE).

JB Chemicals said a postal ballot seeking the opinion of its shareholders, however, got majority support with only less than 5 per cent of the shareholders dissenting to the resolution.

The board of directors of J B Chemicals, at its meeting on 22 July had approved a definitive agreement to sell the company's Russia-CIS prescription products business to Dr Reddy's Laborites Ltd. The transaction involved sale of the company, including product registrations, intellectual properties etc, for a total consideration of Rs137.5 crore.

DRL's Russian affiliate had also entered into a contract with JB Chemicals' wholly owned subsidiary in Russia for purchase of its inventory for a tentative consideration of $3.9 million.

Consequently, JBCPL's subsidiary situated in Russia and Dr Reddy's Russian subsidiary have also called off their proposed agreement in relation to sale of prescription products' inventory held by JBCPL's said subsidiary to Dr Reddy's Russian subsidiary, the filing said.

JBCPL said it would now continue to pursue its Russia-CS prescription products business aggressively.